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UB demerges brewery biz as BrewCo

Our Bureau

MUMBAI, Aug. 9

THE board of United Breweries Ltd today approved the demerger of its brewery business into a separate entity called BrewCo, effective August 1.

A swap ratio of 4:10, four new equity shares in BrewCo for every 10 shares held in UB, has been recommended by the board, according to a press release. The scheme of demerger will be subject to relevant approvals including that of the Karnataka High Cour t.

BrewCo is now a 100 per cent subsidiary of UB and will carry out all the brewery business of the UB group including the main United Breweries and subsidiaries Associated Breweries and Millenium Alcobev. About 18-20 breweries will come under BrewCo. In fi scal 2000-01, the brewery sales of the group were 25.3 million dozens aggregating an approximate Rs 460 crore.

UB will continue to hold assets, which include the controlling stake in the spirits' business and other liquid investments, the company said.

UB has a paid-up capital of Rs 2.8 crore comprising 2.8 million equity shares of Rs 10 each. Consequent to the merger, the equity capital of BrewCo will be Rs 18.37 crore comprising 18.37 million shares of Rs 10 each while the share capital of UB will be reduced to Rs 22.40 crore, according to the press release.

Early this year, Mr Vijay Mallya, UB group Chairman, had announced restructuring plans which included creating a separate company for the brewery business and divesting from its non-core businesses.

The company is in the process of roping in a strategic partner for the brewery company for which Kotak Mahindra Capital Co has been appointed.

The restructuring process is expected to be completed by the year-end. UB had appointed two independent valuers, Deloitte Haskins and Sells and IL&FS for the exercise.